In this issue:
- The Government restricts state procurement of foreign pharmaceuticals
- Ministry of Health developed standard supply contract terms for pharmaceuticals and medical devices
- Pharmaceutical companies localizing full-cycle production could receive additional preferences
- Ministry of Healthcare proposes administrative liability for violations in online trade of pharmaceuticals
The Government restricts state procurement of foreign pharmaceuticals
The Prime Minister has signed the Government Resolution dd. November 30, 2015 # 1289 “On Restrictions to and Terms of Access of Essential Drugs Originating from Foreign Countries to State and Municipal Procurements”.
According to the document, the state procurer shall reject all the applications for supply of pharmaceuticals originating from foreign countries (except the EAEC member countries) in case of receiving two and more applications which comply with the documentation requirements and meet the following simultaneous conditions:
- the applications offer supply of pharmaceuticals originating from EAEC member countries;
- the pharmaceuticals offered for supply are not produced by the same manufacturer or by affiliated manufacturers.
The country of origin is confirmed by the Certificate issued by the authorized body (entity) of the respective EAEC member country. The Certificate proforma is established by the Agreement on the Rules for Determining the Country of Goods Origin in the Commonwealth of Independent States dd. November 20, 2009.
The Resolution establishes the following exceptions to the said restrictions:
- till December 31, 2016: if primary and/or secondary packing and release quality control testing is performed in a EAEC member country
- if the state / municipal purchase order for pharmaceuticals was placed before the enactment of the Resolution;
- if the pharmaceuticals are procured for the needs of customers operating in foreign countries.
при размещении извещений о закупках лекарственных препаратов до вступления в силу постановления, а также при закупках лекарственных препаратов заказчиками, работающими на территории иностранного государства, для обеспечения своей деятельности на этой территории.
Ministry of Health developed standard supply contract terms for pharmaceuticals and medical devices
According to the documents, the supply contracts must contain the following sections:
- subject of the contract (description of the subject according to requirements of the Russian Civil Code, the place, conditions and procedure of supply),
- contract price (the price and payment currency shall be set in Russian rubles),
- rights and liabilities of the parties;
- goods quality expertise,
- packaging and marking of goods,
- delivery procedure and related documentation,
- payments procedure, etc.
Additionally, the information map of standard supply contract terms for pharmaceuticals and medical devices is presented in the annex to the draft orders.
Pharmaceutical companies localizing full-cycle production could receive additional preferences
Currently, price preferences of 15% are granted by the Ministry for Economic Development for domestic manufacturers when participating in state procurements. According to the Ministry for Industry and Trade, the preferences for full-cycle manufacturers (including API production) may be increased to 30%.
Ministry of Healthcare proposes administrative liability for violations in online trade of pharmaceuticals
The Ministry of Healthcare placed for public discussions the draft Law on amendments to legislation regulating online trade of pharmaceuticals. Public discussions of the Draft “On Amendments to Legislative Acts of the Russian Federation Governing Online Trade of Pharmaceuticals” is open till December 28, 2015.
According to the draft law, online retail trade of pharmaceuticals may be carried out only by drugstores (pharmacies) holding the pharmaceutical license. The draft envisages blocking of the websites run by entities which trade pharmaceuticals without obtaining a permit.
Currently, all the websites trading pharmaceuticals online can be blocked under the pre-trial procedure.
Additionally, the Ministry suggests to impose administrative liability for violating of the rules for online trade of pharmaceuticals. The fines are supposed to constitute:
- for individuals – from 1 500 RUB to 3 000 RUB (from 22 USD to 44 USD),
- for officials – from 5 000 RUB to 10 000 RUB (from 72 USD to 144 USD),
- for legal entities – from 20 000 RUB to 30 000 RUB (from 289 USD to 433 USD).
The Federal law is supposed to come into force from January 1, 2017.
The procedure for justifying the impossibility of complying with restrictions for the goods originated from foreign states to come in force from January 1, 2016
The draft Resolution of the Ministry for Economic Development is aimed to support the implementation of the Federal law dd. 29.06.2015 # 188-FZ (coming in force from January 1, 2016). The draft Law envisages the liability for customers to place in the unified information system the justification of impossibility of complying with the restrictions for access of goods, works and services originated from foreign states to the state procurements.
The federal executive bodies responsible for preparing the Russian Government’s regulatory acts restricting the access of goods, works and services to the state procurements, are entitled to set out the conditions when the restrictions should not apply.
For these purposes the federal executives have to define the requirements to content of the justification why it is not possible to apply the restrictions.
The justification is to be prepared by the procurer and shall be published together with the notification on the state procurement commencement.
The Government amended the procedure of concluding long-term state contracts
The amendments envisage, inter alia, the following:
- the regional executive authorities are empowered to define the party (the investor) to the special investment contract as the sole supplier of goods, works and services in the territory of this region and municipal districts,
- the minimum investment required for creation (modernization) and/or development of manufacturing is set at RUB 3 billion for the federal special investment contract and at RUB 1 billion for the regional special investment contract,
- the Government is empowered to establish the procedure of maintaining the register of the sole suppliers and to determine the federal executive body responsible for maintaining this register,
- the specific features, conditions and procedure of termination are defined for a contract for supply of the goods which production is created (modernized) and/or developed in Russia under a special investment contact,
- amendments are introduced into the Russian Land Code with respect to leasing out the state- and municipal-owned land plots without a tender procedure to investors concluding special investment contracts,
- the Government is empowered to determine the approach to classifying goods as industrial products having no analogues produced in Russia.
Additionally, it is being considered whether a producer could be disallowed from participating in state procurements, or the state customer could be entitled to resign from contracting, if the proposed price for an Essential Drug exceeds the registered maximum ex-factory price.
The previous Pharma Bulletin issues are accessible our site.
Prepared for you by KPMG in Russia and the CIS, Healthcare & Pharmaceuticals Sector.